COMMITTEE HEARING OF ORAL ARGUMENTS CALIFORNIA ENERGY ... · 25/07/2011 · Bob Therkelsen Therkelsen Energy and Environmental Consulting. ... Adams, Broadwell, Joseph & Cardozo

EHLERT BUSINESS GROUP(916) 851-5976

COMMITTEE HEARING OF ORAL ARGUMENTS

BEFORE THE

CALIFORNIA ENERGY RESOURCES CONSERVATION

AND DEVELOPMENT COMMISSION

In the Matter of: ))

Application for Certification for the ) Docket No.Ridgecrest Solar Power Project ) 09-AFC-9________________________________________)

CALIFORNIA ENERGY COMMISSION

HEARING ROOM A

1516 NINTH STREET

SACRAMENTO, CALIFORNIA

MONDAY, JULY 25, 2011

10:00 a.m.

Reported by:John CotaContract No. 170-09-002


ii

COMMITTEE MEMBERS

James D. Boyd, Vice Chairman and Presiding Member

HEARING OFFICER, ADVISORS

Kourtney Vaccaro, Hearing Officer

Tim Olson, Advisor to Commissioner Boyd

STAFF

Jared Babula, Staff Counsel

Eric Solorio, Project Manager

Maggie Read

OFFICE OF THE PUBLIC ADVISER

Jennifer Jennings, Public Adviser

APPLICANT

Scott Galati, AttorneyDavid Wiseman, AttorneyGalati|Blek, LLP

Alice HarronBilly OwensSolar Trust of AmericaSTA Development, LLC

Bob TherkelsenTherkelsen Energy and Environmental Consulting


iii

INTERVENORS (All Present Via WebEx)

Elizabeth KlebanerAdams, Broadwell, Joseph & Cardozorepresenting California Unions for Reliable Energy (CURE)

Lisa BelenkyCenter for Biological Diversity

Sidney SillimanDesert Tortoise Council

Michael J. Connor, Ph.D.Western Watersheds Project

INTERESTED AGENCIES (All Present Via WebEx)

Craig MurphyKern County Planning and Community Development

Janet EubanksU.S. Department of the InteriorBureau of Land ManagementCalifornia Desert District

MEMBERS OF THE PUBLIC (All Present Via WebEx)

Judy DeckerRidgecrest, California


iv

I N D E X

Page

Proceedings 1

Call to Order and Introductions 1

Purpose of the Committee Hearing 5

Oral Arguments on Solar Trust of America's Motion forOrder Affirming Application of Jurisdictional Waiver

Comments by the PartiesMr. Galati, Applicant 6Mr. Babula, CEC Staff 30Dr. Connor, Western Watershed Project 36Mr. Silliman, Desert Tortoise Council 39Ms. Belenky, Center for Biological Diversity 42Ms. Klebaner, CURE 43

Applicant's Response 44

Public CommentCraig Murphy, Kern County 49Judy Decker 59

Closing Remarks by Presiding Member Boyd 61

Adjournment 63

Reporter's Certificate 64


1

PROCEEDINGS1

10:09 a.m.2

PRESIDING MEMBER BOYD: I'll say good morning.3

Welcome to this committee hearing on the Ridgecrest Solar4

Power Project. This is a committee hearing to accept oral5

arguments on the applicant, now Solar Trust of America's,6

motion for order affirming application of a jurisdictional7

waiver.8

We are going to proceed now, assuming we have9

everybody we need, with introductions. I, of course, am Jim10

Boyd, the Presiding Member of this case. To my immediate11

right is my advisor, Tim Olson, who is working this case12

with me. To my immediate left of course is our hearing13

advisor, Kourtney Vaccaro, who very shortly will take over14

the responsibility of chairing the hearing.15

I see Jennifer Jennings in the back of the room,16

our public adviser. We don't have a huge amount of public17

so she is very obvious back there all by her lonesome.18

Welcome, Jennifer.19

And I guess at this time I would like to have20

folks introduce themselves. We have a fair number of folks21

on the phone so after we -- as go through the sum of the22

intervenors at least who are likely to be on the phone. I23

would ask first if the applicant provide introductions of24

their folks and then we'll move to the staff then we'll move25


2

to the intervenors. So applicant, good morning.1

MR. GALATI: Good morning, Commissioner Boyd,2

Hearing Advisor Kourtney Vaccaro and Mr. Olson. Scott3

Galati on behalf of STA Development. Also with us, working4

on this today, who you will hear from today is Bob5

Therkelsen. I also am assisted by my colleague, David6

Wiseman.7

PRESIDING MEMBER BOYD: Okay. Staff.8

MR. BABULA: Hi, I'm Jared Babula, staff counsel,9

and I'm with --10

MR. GALATI: Oh.11

MR. BABULA: -- Eric Solorio, the project manager.12

PRESIDING MEMBER BOYD: I moved too quick,13

apparently. I was looking down instead of up. We didn't14

finish the applicant, I'm sorry.15

MR. OWENS: It's all right, Commissioner. It's16

Billy Owens with STA Development.17

PRESIDING MEMBER BOYD: Welcome back, Mr. Owens.18

MR. OWENS: And I have one other colleague here,19

the president of STA Development, Alice Harron, behind me.20

PRESIDING MEMBER BOYD: Good morning. Nice to see21

you again. All right, we did get all or part of the22

applicant, Mr. Babula and Mr. Solorio. Any other23

introductions that I cut you off from providing?24

MR. BABULA: No, that's it, thanks.25


3

PRESIDING MEMBER BOYD: Okay, thank you. Now1

we'll go through intervenors. CURE, are you on the phone?2

MS. KLEBANER: Yes, we are. This is Elizabeth3

Klebaner for California Unions for Reliable Energy.4

PRESIDING MEMBER BOYD: Thank you, Elizabeth, I5

see your name on our computer log here, good morning.6

MS. KLEBANER: Good morning.7

PRESIDING MEMBER BOYD: How about the Desert8

Tortoise Council?9

MR. SILLIMAN: Yes, this is Sid Silliman from the10

Desert Tortoise Council.11

PRESIDING MEMBER BOYD: Good morning,12

Mr. Silliman. I see you are logged in as well. Western13

Watershed Project?14

DR. CONNOR: Good morning, this is Michael Connor15

for Western Watersheds Project.16

PRESIDING MEMBER BOYD: Good morning, Michael.17

You too are logged in on our computer. Basin and Range18

Watch?19

(No response.)20

PRESIDING MEMBER BOYD: Basin and Range Watch?21

Okay, I'm assuming they are not there. We have quite a22

number of callers who are not identified by name, they are23

just logged in by numbers. The Kerncrest Audubon Society?24

(No response.)25


4

PRESIDING MEMBER BOYD: All right. Center for1

Biological Diversity?2

MS. BELENKY: Good morning, this is Lisa Belenky3

for the Center for Biological Diversity.4

PRESIDING MEMBER BOYD: Good morning, Lisa.5

And do we have any state, local or federal6

agencies on the phone or in person in the room who would7

want to identify themselves?8

MR. MURPHY: This is Craig Murphy, Division Chief9

for Kern County Planning and Community Development.10

PRESIDING MEMBER BOYD: Welcome, Mr. Murphy.11

MS. EUBANKS: This is Janet Eubanks with the12

Bureau of Land Management, California Desert District.13

PRESIDING MEMBER BOYD: Good morning. I see you14

logged in. Any other local, federal, state agencies15

represented on the phone who would like to introduce16

themselves?17

(No response.)18

PRESIDING MEMBER BOYD: Okay. So now we have the19

identity of the cast of folks who, until we get to public20

presentations, at least we have them identified. So with21

that, Ms. Vaccaro, I am going to turn this over to you,22

since I seem to be losing my voice anyway.23

HEARING OFFICER VACCARO: Thank you. Again as24

Commissioner Boyd initially indicated, we are here today to25


5

hear oral arguments on the applicant's motion.1

I think we need some ground rules, though, for2

today's proceeding because we do have a number of parties in3

this action and it appears a number of members of the public4

and other interested individuals who might wish to make5

comment.6

We did invite the parties to submit briefing in7

response to the motion and it appears that only a handful of8

written briefs were submitted. That doesn't end the9

discussion, of course.10

I think all of the parties to this action are11

welcome in today's proceeding to make a comment on the12

motion but what we will do is we'll first start with the13

individuals and entities that actually filed written14

documents. We will then move to the remainder of the15

parties to hear whether or not they have any comments; then16

we'll move to the public comment section. That, of course,17

includes the government entities that might be on the line18

as well as any other organizations or individuals.19

So I think one admonition, again, those of you on20

the telephone line. I have said this a few times this21

morning and I know I sound like a broken record. It is very22

important that you hit the mute button on your telephone as23

we are going through today's discussion. When it is your24

opportunity to speak, of course, please take the phone off25


6

of mute. We would ask that you actually speak into your1

headset and not on a speaker phone. But no matter what you2

do please do not put us on hold because that would be very3

disruptive to the proceedings.4

I would like to remind everybody before you speak,5

just for the benefit of those who are on the telephone, and6

it seems like most everyone is, identify yourself before you7

speak and your affiliation. I think that makes the record a8

little more clear but it also helps people to understand who9

is speaking.10

And point of fact, I just heard some background11

noise from a caller. Again, every single caller, it is12

extremely important that you hit the mute button, otherwise13

these proceedings are not going to go as smoothly and14

efficiently, I think, as everyone would like them to.15

I think with that, Mr. Galati, since you are the16

moving party, if you would like to go ahead and explain to17

the Committee a bit more about your motion.18

MR. GALATI: Thank you. I am going to apologize19

in advance. I normally can keep my opening remarks to a20

couple of minutes but I am going to have to go a little bit21

longer than that in order to set the framework for this22

particular issue. And I also have Mr. Therkelsen that I23

would like to cede a little bit of time to address one of24

the issues that I think is important to the Committee. So I25


7

will move very quickly but it would be a little bit longer1

than a couple of minutes. Thank you.2

First of all I want to just make sure that3

everybody understands what we are not doing today. I think4

that's important.5

The first thing is, you are not approving the6

Ridgecrest project. Something else that you are not doing7

is you are not requiring PV projects, by ruling on this8

motion you are not requiring PV projects to come to the9

Energy Commission --10

(Telephone line interference.)11

MR. GALATI: You are not requiring PV projects to12

come to the Energy Commission and file an application here.13

They are exempt, they are excluded, they do not have to14

file here. And we acknowledge that.15

I notice that there was a letter by the PV16

industry, maybe we didn't make that clear. What we are17

asking for is acknowledgement of an existing provision of18

the Warren-Alquist Act that allows, we believe, a project19

that would be a PV project to voluntarily decide to come20

here. But there would be no requirement that they would21

have to.22

We believe that our interpretation of this waiver23

provision that I'll go into in more detail, is the only24

reasonable interpretation for the following reasons. We25


8

think it's supported by the plain meaning of the statute.1

It's supported by the legislative direction on how you're2

supposed to read the statute. It's supported by legislative3

history. And not just some of the legislative history, all4

of the legislative history from 1974 through 19945

amendments.6

We believe that it's supported by the Attorney7

General Opinion that is cited by staff from 1974. We8

believe that it is also supported by the Legislative Council9

opinion that we included in our papers. And I think most10

importantly, it's supported by the 1994 amendment which11

chose to leave this provision exactly in place as an opt-in12

provision.13

There was some confusion early on about what is a14

waiver so I just want to describe what it is we're doing.15

Again, we are not saying that the Energy Commission has16

mandatory exclusive jurisdiction over PV. It's not what we17

are saying. What we are saying is, projects that are18

excluded, i.e., would normally have to file with the Energy19

Commission, those that are excluded, those projects can use20

this wavier to come to the Energy Commission voluntarily.21

So we make a distinction between the Warren-22

Alquist Act that provides for mandatory exclusive23

jurisdiction, you can only come here, and permissive24

exclusive jurisdiction where you may elect to come here.25


9

In order to understand the waiver we need to1

understand what kind of projects are excluded or exempted.2

What people don't have to come to the Energy Commission to3

get their license. And I think historically there are five4

types.5

Projects that had a Certificate of Public6

Convenience and Necessity, a CPCN from the Public Utilities7

Commission, were exempted in 1974 from having to come to the8

Commission because they had their approval.9

Projects that were going to commence construction10

within three years from the date of the Warren-Alquist Act,11

they're excluded. Because it would be fundamentally unfair12

to make them start over.13

Projects that were on a particular list were14

exempted and excluded from Energy Commission jurisdiction.15

And lastly there's two others that we need to talk16

about, one just to dispense with, is you have a Small Power17

Plant exemption, which is a way in which somebody could come18

with a project 100 megawatts or less and ask to be exempted19

from the Energy Commission.20

And then lastly there are definitional exclusions,21

projects that do not have to file at the Energy Commission22

because they don't meet the definitions of facility.23

Historically there were three types of waivers and24

they are three exclusive waivers. The first we'll dispense25


10

with very quickly. It's a wavier for the small power plant1

exemption. It's under Public Resources Code 25541.2

And how you would invoke that waiver was you don't3

file for an exemption. In fact, you could have. For4

example, you're a 90 megawatt project. You could qualify5

for a small power plant exemption but you choose not to.6

You choose, as an applicant, to file an AFC. That's a7

waiver of that exemption. You cannot go back later and say,8

I need to be exempt. You have elected to be covered by the9

Energy Commission, you are waiving that exemption.10

The next is a very specific waiver that was11

intended for projects that were grandfathered. That's under12

25501.7. That's not the waiver we are talking about here13

either. We are talking about a waiver under 25502.3 that we14

consider to be a large general waiver, a big circle, if you15

will. The specific wavier that I mentioned, 25501.7 for the16

grandfathered projects, is a smaller, specific waiver within17

the bigger general waiver and I'll get to that more18

specifically.19

The waiver we're talking about uses the following20

terms, except as provided in Section 25501.7. Remember I21

mentioned that's the grandfathering provision waiver. Any22

person proposing to construct a facility excluded from the23

provisions of the chapter may waive such exclusion. And the24

rest of the chapter says how you do that and what it means.25


11

So one of our disagreements with staff has to do1

with how do we interpret the specific language of facility2

excluded. And I think reasonable minds can differ and3

that's exactly what we have here.4

We think it's important to understand a couple of5

things about the use of the word "facility." The Warren-6

Alquist Act itself, the Energy Commission regulations and7

our general vernacular often use the word "facility" both8

generally and specifically. Not always when we use the word9

"facility" or does the Warren-Alquist Act when it uses the10

word "facility" does it mean the definition in 25510 -- 110,11

or 255120 -- excuse me, 25120 and 25110. Those are specific12

definitions. And like anyone who has read this provision13

you would start there.14

25100 is a prelude to the definitions and it says:15

"Unless the context otherwise requires you shall use the16

following definitions." We think the Legislature has given17

you direction that there are some times, and we'll point18

them out in our brief, in the Warren-Alquist Act where they19

use the word "facility" when it doesn't make any sense and20

doesn't accomplish the legislative intent or purpose to use21

the definitions in 25110 and 25120. We submit to you that22

our waiver under 25502.3 is another example of that.23

What is covered by the Energy Commission's24

mandatory exclusive jurisdiction is a power plant that uses25


12

thermal energy and greater than 50 megawatts. If it's a1

thermal power plant, if it's a project that uses thermal2

energy and was 49 megawatts it's excluded from the Energy3

Commission jurisdiction. Just in the same way that 2551204

(sic) excludes PV. Specifically it's excluded from Energy5

Commission exclusive mandatory jurisdiction.6

If you insert the definitions of facility and7

thermal power plant into 25502.3, the waiver provision we're8

talking about, you end up with something that doesn't make9

sense. What you end up with is it says, if you are a10

thermal power plant greater than 50 megawatts you can11

voluntarily elect to come to the Energy Commission. Now we12

all know that if you are a thermal power plant greater than13

50 megawatts you already have to come to the Energy14

Commission so what is the reason for a waiver to voluntarily15

come to the Energy Commission if you must be here? And that16

is our fundamental reason why it doesn't make any sense to17

insert the definitions into 25502.3.18

So in trying to find out what does 25502.3 mean,19

staff went in one direction. It must have been an old20

provision that used to make sense a long time ago and21

doesn't make sense now. And be believe that the legislative22

history is such that you really can't come to that23

conclusion.24

We believe that there is case law -- in fact,25


13

staff cites a long string of cases and we cite a string of1

different cases but they all say the same thing. And that2

is, the plain meaning of the statute is to be given3

preference.4

And here we believe that "facility excluded" means5

what projects don't have to come to the Commission6

mandatorily as opposed to thermal power plants that already7

have to be there. Our support for that, again, is 251008

that says, if the context doesn't require you don't have to9

use the definition. The case law which says you try to10

harmonize the statutes.11

A couple of other examples of where the word12

"facility" is used in a general sense and not in a specific13

sense, in a common sense meaning, is even in the definition14

itself. The word "facility" is used in the definition of15

"thermal power plant" five times. You cannot come up with a16

coherent sentence if you kept putting the definition of17

"facility" into the definition of "thermal power plant."18

(Music coming through telephone line.)19

MR. GALATI: And a perfect example, if you look at20

our additional brief, in our additional brief --21

PRESIDING MEMBER BOYD: Excuse us, Mr. Galati.22

This may be a problem. Somebody out there in telephone land23

has put their phone on mute and we now have Muzak24

broadcasting throughout our --25


14

(Music stopped.)1

PRESIDING MEMBER BOYD: Thank you. Or maybe our2

staff. Anyway, excuse the interruption, Mr. Galati.3

MR. GALATI: Thank you.4

PRESIDING MEMBER BOYD: An example of what Hearing5

Officer Vaccaro tried desperately to preclude with her6

polite remarks about please mute, please be careful of any7

noises you make. You can't mute your phone out there8

because everything is broadcast in the hearing room here.9

Go ahead.10

MR. GALATI: Thank you. At page 9 of our11

additional brief we show you in Section 25120. The last12

sentence of Section 25120 says: "Thermal power plant does13

not include any wind, hydroelectric or solar photovoltaic14

electrical generating facility."15

So if you had to use the word "facility" there16

using the definition you would come up with an absurd result17

that the Legislature intended to exclude from mandatory18

exclusive jurisdiction of the Energy Commission solar PV19

projects that were also solar thermal projects. And we know20

that's not the case and we show you the legislative history21

in our attachments of that provision, the 1988 amendment,22

that they intended to not require PV projects to the Energy23

Commission. We are not doing anything that would change24

that.25


15

So there is a perfect example where the word1

"facility" if you used, if you stuck to the narrow2

interpretation of the definitions, ignored the legislative3

finding to let the context drive you, not look at the plain4

meaning of the language, ignored the cases where you tried5

to harmonize, you would come up with an absurd result.6

25502.3 as staff has proposed, is the same way.7

In addition the word, the word "thermal power8

plant." Again, the rest of that definition uses the term9

"facility" many, many times. In fact, staff struggled with10

it at the very beginning of the Warren-Alquist Act in11

developing regulations because they didn't know what the12

difference between a "related facility," which is not13

defined in the statute, and a "facility."14

So they came up with a definition of "related15

facilities" in the regulation. Because the word "facility"16

is used in the Warren-Alquist Act many times when it does17

not mean a power plant using thermal energy only greater18

than 50 megawatts. So we ask you to not throw out your19

common sense and try to figure out what this waiver20

provision meant.21

So staff agrees that the waiver provision must22

have had some reason to be there, 25502.3. And so staff23

believes, as did we when we first read it until we did the24

further research, is there were these grandfathering25


16

projects I told you about, the 25501. That maybe it applied1

to them and it was inadvertently left in the Warren-Alquist2

Act and it really has no purpose.3

The problem is the Supreme Court doesn't allow you4

to make a determination that the Legislature, although you5

may think they did, you have to assume they intended to6

leave it in place. And I'd like to in a little bit ask Bob7

Therkelsen to recall what happened in 1994 while he was here8

to help enlighten that.9

But let's first look at the legislative history10

from 1974. Projects that were on the list were projects11

that the Legislature deemed were going to be built in three12

years. There is also a provision that says if you are not13

on the list --14

(Voices interfering over the Telephone line.)15

PRESIDING MEMBER BOYD: An open conversation.16

Folks, people talking out there, we're listening to you.17

You're broadcasting in the room and interrupting the hearing18

so please be careful.19

SPEAKER: We apologize.20

PRESIDING MEMBER BOYD: Thank you.21

MR. GALATI: So 25501 is the grandfathering22

provision that says, here's all the grandfathered projects23

that can't come in -- don't have to come here. You have a24

CPCN, you were going to start construction in three years.25


17

We're going to make a list of those projects that we know1

are going to start construction in three years. We are also2

going to give you a test that if you are not on the list you3

could still go through and demonstrate you were planning4

construction for three years. All of those projects were5

excluded and exempted from Energy Commission jurisdiction.6

In the same series, in the 2501 series the7

Legislature included a waiver. It's a specific waiver.8

It's 25501.7. And it says, all those people, the CPCN,9

going to start construction or on the list, if you want to10

come to the Energy Commission go ahead and waive and come11

here.12

Now we move to the next provision, which is the13

2502 series. It's a different series. And there's another14

waiver there, 25502.3. And it says by its very terms,15

except for those guys that are waiving under 25501.7, any16

person for a facility excluded, can use the waiver. We17

believe that the language itself shows that these are18

separate and distinct.19

It doesn't mean that someone on the list couldn't20

use the 25502.3 waiver if for some reason they didn't start21

construction or something like that. But it certainly was22

not intended just for that. Why would the Legislature have23

created two exact waivers to do exactly the same thing and24

put them in two separate sections and use different language25


18

and then say in one, except the other? It doesn't make any1

sense. It isn't supported that that 25502.3 was intended2

for the grandfathering provision, they had their own waiver.3

Therefore, it must apply to something.4

More telling, if you're going to use the5

legislative history you ought to use all of it, not just6

1974. Not just the Attorney General's opinion, which we7

believe supports it's two separate, distinct waivers. Not8

the Leg Council's opinion which we cited which supports two9

distinct waivers. Not the language itself in 1974, which we10

believe shows two distinct waivers. But in 1994 when the11

Legislature went through with the Energy Commission's help12

and took out obsolete provisions it consciously elected to13

keep 2502.3 in and of itself.14

So what I would like to do at this time is to ask15

Bob Therkelsen to come up for a few minutes and describe,16

since he was intimately involved in that amendment in 199417

on behalf of the Commission.18

MR. THERKELSEN: Good morning, Commissioner Boyd,19

Ms. Vaccaro and Mr. Olson.20

PRESIDING MEMBER BOYD: Good to see you back.21

It's happening more and more, I notice.22

MR. THERKELSEN: Thank you. My name is Bob23

Therkelsen, I am representing Solar Trust of America on this24

particular issue. What I would like to do, I guess first of25


19

all, is indicate that I concur with Mr. Galati's analysis of1

the waiver and the language. I think the plain reading is2

very straightforward and is consistent with my reading. It3

also, I believe, is consistent with the policy objectives4

that were developed over the course of the Warren-Alquist5

Act, or I should say the Commission's implementation of the6

Warren-Alquist Act. And also with what the legislative7

action was or was not in 1994.8

Let me kind of break my comments into two pieces,9

one historical and one is 1994 and afterwards. When I10

joined the Energy Commission back in 1975 one of my first11

responsibilities, requirements was to look at the Warren-12

Alquist Act to see if I could understand it. A lot of us13

back then were trying to sort out what it meant and how it14

was to be applied.15

And in going through the siting section, to me at16

that time, it was clear that there were all these projects17

that were to be exempt from the process. The utilities made18

sure that their projects that they had in the pipeline or19

anticipated were protected from this new animal. And there20

was the process that would be applied to move things moving21

forward.22

There also then was that waiver to exempt any of23

those projects the utilities had in the pipeline. But24

again, in my reading early on there was the waiver provision25


20

that Scott is referring to that was kind of an opt-in1

clause. That's the way that I understood it at the time and2

understood it for years subsequent.3

Now the question is, why didn't anybody ever use4

that provision If it was there? I think the answer to that5

is very simple. Back in the 1970s the utilities were still6

putting in their next string of projects, High Desert7

Nuclear Power Plant, CalCoal, Fossil 1 and 2. You can name8

the list of projects that were large utility projects.9

After that came the QF era where projects10

basically that were smaller were allowed to reduce power11

purchase agreements. And most of those projects were small.12

They would be logical ones to come into the Energy13

Commission's process. This was in the 1980s.14

Those projects, however, were deathly afraid of15

the Commission's process. Number one, it was still16

uncertain. It didn't provide any guarantees at that time.17

It was more detailed and excruciating than the local18

government process, particularly if you had political19

support for your project at a city or county level. Sounds20

familiar even now.21

But in addition to that the Commission had this22

thing called the "need assessment." And at that day and age23

we actually had an oversupply of electricity. The24

Commission actually had a queue where if you were a project25


21

you were allowed only X number of megawatts per year to be1

permitted. Projects got into that queue and, you know, were2

either dealt with or not dealt with. In fact I remember3

hearings in this very room trying to determine what would be4

in the queue and what wouldn't be in the queue and how it5

would work, et cetera.6

There was an IQ test for all QF developers back7

then. And that is, what size do you build a power plant in8

California. And the answer was, 49 megawatts because you9

did not want to come into the Energy Commission's10

jurisdiction and experience the need test along with11

everything else.12

Well the world changed in the 1990s. As you13

remember deregulation was something that was the new thing14

and projects at that point in time were looking to a new,15

unregulated market in the electricity industry. Competitive16

market I should say in the electricity industry.17

And actually if you look at a diagram of what the18

applications were being received by the Commission in the19

1990s it dropped off precipitously. In fact, one thing I20

would suggest in terms of context is in 2000 the Commission21

produced a document called Improvements to the Energy22

Commission's Energy Facility Licensing Process, which kind23

of compares what was going on in the Commission before 199624

and after 1996.25


22

In terms of, very briefly, that context at that1

time, 1994. I was the Deputy Director of the Energy2

Facility Siting and Environmental Protection Division. I3

was working with the Siting Committee and with the General4

Counsel in terms of trying to make revisions to the Warren-5

Alquist Act. We saw restructuring coming. We wanted to6

make sure that we were competitive with other state agencies7

in terms of our functions and duties. We wanted to clean up8

the law to get rid of irrelevant, old things. If we could9

put in new items that we thought would be appropriate, and10

frankly, we tried to actually stay away from major new11

initiatives at that time.12

All of the projects being proposed in the '90s, in13

fact in 1995 we had zero new siting applications; in 1994 I14

think we had one or two. But everybody was uncertain what15

restructuring was going to do. They didn't want to propose16

new power plants. But they knew to be competitive they had17

to be big. They had to take advantage of economics of scale18

and they also needed to be natural gas. That was the fuel19

of choice given the fact that we had an aging power plant20

fleet. We had declining reserves. We needed to build power21

plants and build them fast. Commissioner, as you recall,22

during the energy crisis we did them in 21 days and four23

months and six months, everything else.24

Anyway, that was the context, then, of the25


23

legislative changes that we looked at. So it was a cleanup.1

It was getting rid of old material. And we intentionally2

talked to developers to see what was important to them and3

several developers came to me and said, look. We realize4

that the committed market is coming but we would like an5

option to come into the Commission. My reaction was, it's6

already there. Nobody has exercised it but it's there.7

So when we went through the Warren-Alquist Act,8

when we talked to the Siting Committee we excised, you know,9

irrelevant sections but we left in the provision that Scott10

is talking about because we knew it was an opt-in provision.11

We didn't make a big deal of it, it already existed. There12

wasn't any reason to make a big deal of it. Besides, we13

didn't want people to think we were doing a power grab and14

misunderstanding what was going on at the time so we left15

that section in.16

Now the question remains, why didn't anybody take17

advantage of it? Well as I mentioned before, the18

competitive market moved in. And after those amendments19

were adopted by the Legislature people were proposing big20

projects, natural gas projects. PV was thought of at the21

time but only really in the context of rooftop solar. It22

wasn't really thought of in terms of a larger thing.23

In fact, most solar facilities of any kind,24

whether they were concentrating or PV, were realized to be25


24

very expensive and only in unique circumstances would they1

really be proposed in a competitive market. So frankly, as2

deputy director of the siting division at that time, I3

didn't think that we would be doing much of those. We had4

dealt with solar before, you know, the Luz projects. I5

didn't, frankly, think we would see any solar projects for a6

long time. So that's why the waiver had not been used.7

In terms them of where we are today. My feeling8

now, as then, is that the plain meaning of the language9

basically allows the waiver. It was an option that we10

strategically made a decision in 1994 to leave in so it11

could be taken advantage of if desired by a developer. And12

I think it also is consistent with the action of the13

Legislature. They concurred with our recommendation. They14

eliminated a number of sections that were outdated but they15

left that provision in at our recommendation.16

I would be more than willing to answer any17

questions. Again, I support the proposal that Scott is18

putting forward.19

MR. GALATI: So if I could just -- I promise I'll20

only take a minute more just to summarize. We think that,21

again, the provision does not require you to come here for a22

PV project. It doesn't, we're not suggesting it should.23

We still believe that our interpretation is the24

only reasonable interpretation of the plain meaning, it's25


25

supported by the legislative history both in '74 and in1

1994.2

We believe that if you stick to the narrow3

interpretation of "facility," find that it actually applied4

to the grandfathering provision as proposed by staff, you5

would be making a decision that the Legislature in 19746

created two different language pieces of a waiver, two7

separate ones to accomplish the exact same thing. And you8

would also be ignoring in 1994 the conscious decision to9

leave the waiver in place, even though no grandfathering10

provision was still in existence. Projects that were11

subject to the grandfathering provision were subject for12

three years or a CPCN.13

And you still can waive, by the way, if you have a14

CPCN you still can waive under 25501.7. But 25502.3 we15

think is a very, very reasonable interpretation. We believe16

that it's supported by the case law from the Supreme Court17

on how it would be interpreted. I think there is very18

little risk to the Commission of acting on this voluntary19

waiver and having a lawsuit or having a lawsuit that would20

be lost.21

So we would like to make sure that we are -- while22

we are dealing in the context of Ridgecrest it's a legal23

interpretation and it will have ramifications for other24

developers who may choose at their own to come here with a25


26

project that wouldn't normally have to come here.1

So thank you for as much time. I apologize for2

taking that much time but it was a, it was sort of a complex3

issue to write about and I think it's easier to talk about,4

so thank you.5

PRESIDING MEMBER BOYD: I have no questions. I6

appreciate the presentation. No need to apologize from my7

perspective. This is a complex legal issue that we have to8

adjudicate.9

MS. BELENKY: I'm sorry, can I -- this is Lisa10

Belenky at the Center for Biological Diversity. I just11

wanted to make one comment which is that I have a previously12

scheduled court call at 11:00 and I will need to get off the13

phone and I will try to call back in right afterwards. I14

wasn't able to reschedule that hearing, which was scheduled15

before this call.16

HEARING OFFICER VACCARO: Thank you for that17

information, Ms. Belenky. The next in order was going to be18

staff. I don't see any particular reason why can't hear19

from you next. I do have two questions, though, for the20

applicant. So if you would just hold on for just a few21

moments, Ms. Belenky, I think we can hear from you before22

11:00.23

MS. BELENKY: I am not asking you to change the24

order. I am just informing you so that there isn't the25


27

impression created that I am not paying attention or1

interested or trying to be involved in this. The hearing2

was scheduled without any notice to the parties and asking3

whether it was an appropriate time and it turns out that it4

is not for one of the parties; it is a very difficult time5

for me. And I am just making it clear that I am here, I am6

not asking you to change the order.7

HEARING OFFICER VACCARO: I understand that. And8

what I am doing is trying to extend a courtesy to you. So9

if you would like to go next, Ms. Belenky, the Center for10

Biological Diversity is certainly welcome to do that. Right11

now I do have two questions for the applicant and then we'll12

ask you whether or not you are willing to make your comments13

at this time before your 11:00 o'clock call.14

Mr. Galati --15

MS. BELENKY: This is not a comment period, this16

is oral argument and I cannot actually do oral argument on a17

matter when I am up against a deadline to be on a court18

call. The District Court would be very unhappy with me if I19

am not on that call at the exact right moment. So I would20

not ask for it to be that I be given some small amount of21

time before I have to get off. I was simply trying to22

explain why I would have to leave and come back. Thank you.23

HEARING OFFICER VACCARO: Okay, thank you.24

Mr. Galati, two questions for you. I think what25


28

is not clear in the motion, and I didn't see it in the reply1

papers and still haven't heard anything yet from the2

applicant so if I have missed it I apologize. But perhaps3

you could clarify what it is that the applicant is4

proposing. I think the motion papers state that Solar Trust5

wishes to inform the Committee that it is exploring redesign6

and that the redesign would utilize photovoltaic technology7

but I think I am not entirely clear.8

Is it that the redesign envisions a 100 percent PV9

facility? Is it that there would be a PV component? Is10

that something that has been put in writing before all of11

the parties? Because I am not sure on that. Please don't12

answer yet because I'll give you the second question and13

then you can answer everything.14

Just assuming for the sake of argument that the15

applicant is correct in its interpretation of the statute.16

The statute also has some very plain language used that17

specifically states, and I am sure the applicant and18

everyone is aware of this: "Any person proposing to19

construct a facility excluded from the provisions of this20

chapter may waive such exclusion by submitting to the21

Commission a Notice of Intention to file an Application for22

Certification."23

At this point the applicant has submitted an24

Application for Certification for a 100 percent solar25


29

thermal power plant. Haven't seen a Notice of Intent at1

this point and I'm wondering whether or not the applicant2

believes that that plain language would also be applicable,3

assuming that you're correct in your interpretation of4

25502.3.5

MR. GALATI: I'll answer that question first. And6

yes, we do believe we would have to file a Notice of Intent.7

How the Commission handles such a Notice of Intent would be8

a subject of debate at a later time of what that actually9

means.10

But you have to understand that we are in a11

difficult position because the Commission has not heard this12

waiver before. We certainly do not want to go out, redesign13

a project that is 100 percent PV, file a Notice of Intent14

with the Energy Commission and find out after all of that15

work that we shouldn't be here. So we are asking for a16

legal interpretation ahead of time. But our plan, our plan17

is a 100 percent PV project that is much smaller than its18

current footprint in order to reduce the environmental19

impacts that have plagued the project. That is our plan.20

We are not proposing a hybrid project. And21

because we didn't -- we wanted the flexibility to continue22

to work with the Commission on this we needed an23

interpretation on this.24

I will tell you that we did approach staff and25


30

staff said that the Commission's direction was that they1

were going to handle these kinds of things on a case-by-case2

basis. And so while it is in the context of Ridgecrest for3

us it is a pretty global request and understanding and4

guidance that we're hoping to applicants in the future about5

what their options might be. And it might be that a brand6

new applicant would need to file a Notice of Intent. So we7

do agree that the language does mean Notice of Intent.8

HEARING OFFICER VACCARO: Okay, thank you. I9

think at this time, Mr. Babula, if you're ready we'll hear10

from staff.11

MR. BABULA: Thank you. First I would just like12

to start off, just to remind the Committee. While I13

appreciate Mr. Therkelsen's historical perspective, he is14

opining on legislation. And so the fact that he formerly15

worked here shouldn't be given any greater weight in the16

sense that he is not talking about our regulations, he is17

trying to assess what legislation means and trying to put18

his own opinion forth regarding the meaning of these19

different sections.20

I think one of the key things that Scott pointed21

out here is this definition and the plain reading, the plain22

reading of the Warren-Alquist Act definition of thermal23

power plant. It's been discussed, it's been briefed. And24

facility, thermal power plant 50 megawatts or larger, that's25


31

our starting point.1

A lot of what he said I agree with. One of the2

key differences is there's these two waiver provisions. The3

applicant's view is that this 25501.7, that applies to these4

grandfathered projects, whether it be one that already has5

an approval from the PUC or it's one of these three-year6

ones that could be constructed in three years or it's on the7

list of ones the Legislature found met that. So his view is8

that those -- that .7 handles those particular projects and9

this 25502.3 is for something else.10

However, if you look at my submission in my brief,11

the original 25501.5 section, which is the list of projects12

the Legislature found met this three year construction date.13

At the very end it identifies both those waiver section as14

applicable. Where it says: "To the extent that Sections15

25501.7 or 25502.3 is made applicable." And this parallels16

the Attorney General opinion that I also submitted as part17

of my brief where it's talking about the Nuclear A project,18

which was a PG&E project that was listed. And the Attorney19

General opinion says they can use both, either 25501.7 or20

25502.3 to then come before the Energy Commission.21

So what is the difference between these two22

sections? Well, it's important to note that even though23

they may apply to the same projects they are different in24

that one allows for a waiver to come before the Energy25


32

Commission by filing a Notice of Wavier and the other one, a1

Notice of Intent. So the difference is what the applicant2

is going to have to do to affect these waivers.3

So the fact that they apply to the same types of4

projects, it isn't unexplainable in that you don't have to5

create a new definitional exemption to say, well what's the6

point? The point is one is for projects that are just7

beginning, whereas if you are already further along and you8

want to do a waiver then you can use .7. And that is9

consistent with the Attorney General's opinion and also the10

language in the Warren-Alquist Act itself when it was11

originally submitted where it has both sections in there.12

Another thing that the applicant really has not13

been able to produce is anything in the legislative history14

that discusses this ability for someone to come before the15

Commission voluntarily with a project that is not thermal.16

They are just focusing on PV but their interpretation would17

lend itself to wind, to hydro as well as PV.18

Now I have -- in the applicant's second brief they19

had some legislative history from SB 928 which was these20

1988 changes where they added in the language thermal power21

plant is not PV and hydro and wind are not thermal. And22

I'll pass out these -- this is just one page from that, from23

the Senate Committee on Energy and Public Utilities and it24

talks about the limitations of the Warren-Alquist Act. And25


33

nowhere in here is there any discussion that someone can1

voluntarily come before us with a PV project or a hydro or a2

wind. In the Comments section it says, or in the3

Background:4

"Under the Warren-Alquist Act the5

California Energy Commission is responsible6

for siting thermal power plants of a size7

equal to or greater than 50 megawatts.8

Electrical generating facilities which are9

not thermally powered are exempt from the10

CEC's siting authority."11

And this would be the place where the Legislature12

would want to remind people that there is this voluntary13

aspect because they are adding in language specifically in14

here that says, thermal power plants do not include15

photovoltaic and hydro and wind. So this is really16

something that needs a legislative solution if there is17

ambiguity.18

There is nothing that they have been able to19

produce that has ever been mentioned in any of the20

legislative history, whether we're talking about '74 or '7821

or the '95 changes or the '88 changes that articulate this22

exemption allowance for projects to come before us that are23

not thermal.24

I think my brief fairly clearly identifies the25


34

staff's argument. And let me just check with my, check with1

Eric here to see if he has anything to add.2

(Mr. Babula confers with Mr. Solorio.)3

MR. BABULA: Well let me just summarize an4

important part again and this is the difference between .75

and .3 with the Notice of Intent/Notice of Waiver. And this6

also addresses the reason these two provisions are still7

around is arguably they could still apply to these PUC-8

granted projects that may have not -- for some reason have9

not started construction yet.10

But the main focus is if you are going to do a11

Notice of Intent, that's really at the beginning of the12

process. And so if your project when the Warren-Alquist Act13

was first put forth, if your project is far enough along or14

has gotten, received something from the PUC, then you would15

want to do the Notice of Waiver because you have already16

gone through most of the environmental analysis and so forth17

and so that would be the applicable one. Whereas if you are18

just starting, .3 would be the one you go for. And again,19

there is just nothing in the legislative record history of20

anyone ever identifying these waiver clauses that would21

allow for these non-thermal plants to come before us. I22

think that's all for now, thanks.23

PRESIDING MEMBER BOYD: Thank you. Not being a24

lawyer this is extremely interesting, me having to25


35

adjudicate interpretations of the law that so far parties1

both argue things work in their favor. Now more than many2

times I sympathize with my friends who are judges.3

HEARING OFFICER VACCARO: Okay, sorry for that4

brief intermission.5

I think, again as I mentioned, we'll hear first6

from the parties that submitted written briefs in response7

to the motion. There were only a handful of parties who did8

that, Center for Biological Diversity of course being one.9

However, Ms. Belenky did indicate that for a short time she10

will be offline and hopefully will be back online to make11

oral argument.12

So I think what we'll do at this point is move13

forward to the Western Watersheds Project and we'll hear14

from you at this time.15

MR. BABULA: Before you do that would you like me16

to pass out what I referred to? This would be the Senate17

Committee on Energy and Public Utilities, their assessment18

of -- this is what I read from, so the Committee can have19

it.20

HEARING OFFICER VACCARO: Mr. Babula, yes, it's21

fine if you hand that out. I think what's also important22

that you do is that you get that docketed because that is23

something that I think no one has referred to or seen before24

this time.25


36

MR. BABULA: Right.1

HEARING OFFICER VACCARO: So handing it out is2

fine; you can do it at the end of the proceeding. And then3

if you go ahead and get that docketed as well, thank you.4

So at this time, Mr. Connor, if you are still on5

the line we would like to hear from Western Watersheds6

Project.7

DR. CONNOR: Yes, good morning, I am still on the8

line. And listening intently, even though I am not a lawyer9

either.10

We made a number of points in our response to the11

applicant's motion. First of all there's this issue of12

interpreting the plain language of the Warren-Alquist Act13

itself. And to summarize my first point, clearly the14

Warren-Alquist Act itself specifically excludes photovoltaic15

plants. I think that any interpretation of other clauses in16

the document certainly have to address the specific17

prohibition that's listed in the language and in the intent18

of the Act.19

Secondly, we are extremely concerned that if20

jurisdiction, CEC jurisdiction is extended to PV projects or21

to a specific PV project, this would actually violate CEQA.22

Under the California Environmental Quality Act it is not an23

applicant who chooses which agency will have jurisdiction.24

It's the agencies themselves that determine which agency has25


37

jurisdiction. And in this case we have a number of1

potential agencies that would be the lead on a CEQA2

analysis, on a standard CEQA analysis. These agencies would3

be California Department of Fish and Game and Kern County4

itself.5

It's unclear based on the brief description of the6

project, of the revised PV project that we received from the7

applicant, where in fact the project would be located. But8

the indication was that it would be located south of Brown9

Road, in which case it would be entirely on federal land, in10

which case the appropriate lead agency would apparently be11

California Department of Fish and Game. If the project is12

located on private land then really the lead agency13

(background noise) is the county. But it certainly is14

unclear from the --15

HEARING OFFICER VACCARO: Excuse me, Mr. Connor, I16

have to interrupt you for just a moment to remind our other17

callers that we need you to please hit the mute button18

because we can hear everything you're doing, even when you19

move papers. So right now we are hearing from another20

caller's phone a lot of background noise that is making it21

difficult to hear Mr. Connor. So again, please hit the mute22

button until it is your turn to speak. I apologize,23

Mr. Connor; if you could now continue.24

DR. CONNOR: Okay. Okay, so we have this issue25


38

that CEQA itself lays down the direction of who decides who1

the lead agency is on a project. And the choice of the lead2

agency is made by those agencies that have a role in this3

project. It is unclear from the project description what4

role Kern County, if any, may have in this project. But5

clearly there are going to be issues related to road use,6

transmission lines and so on that may require county7

permits. So it's unclear, you know, which agency should8

have lead jurisdiction. But clearly in this case it would9

have to be the agencies to decide and not the project10

applicant.11

And thirdly, we object to the applicant's approach12

because it basically smacks of forum shopping. What's going13

on here is despite the fact that repeatedly the project14

applicant has stated that staff opposed the project it still15

wants the California Energy Commission rather than16

California Department of Fish and Game or the County to17

review the project.18

And we can only interpret that as meaning that the19

project proponent thinks that they are still going to get a20

more favorable review from the California Energy Commission.21

And if the situation is such that the applicant can choose22

which of these agencies is going to be the lead agency under23

CEQA, it's essentially picking the best forum to get the24

result it desires.25


39

So those are our, those are our statements on this1

motion.2

HEARING OFFICER VACCARO: Thank you, Mr. Connor.3

Desert Tortoise Council. Mr. Silliman, if you are4

still on the line we would like to hear from you.5

MR. SILLIMAN: Yes, this is Sid Silliman with the6

Desert Tortoise Council. We did submit a written statement7

in early July and that was properly docketed.8

And in that statement we urged the Commission to9

reject both the requests that are included in that motion10

for the jurisdictional waiver and the revised scheduling11

order. We urge the Commission to reject both of those.12

The Desert Tortoise Council is a public group.13

We're a small public group. We're also a nonprofit group.14

And what I'd like to do is introduce a notion here that15

there is a public interest that is at stake that needs to be16

taken into consideration. On the one hand I think that17

Solar Millennium/Solar Trust of America is really showing a18

lack of public -- a lack of regard for the public in this19

particular instance.20

The intervenor groups have put in considerable21

time and resources over the last months in good faith. We22

participated vigorously in the Mojave Ground Squirrel Study,23

which has now been abandoned.24

And what we have seen since January is a series of25


40

motions from Solar Millennium/Solar Trust of America, which1

have been multiple and a number of them have been2

contradictory. Motions I think in effect, to keep the3

project alive before the CEC. They asked for a postponement4

of the project to do the multiple -- the Mojave Ground5

Squirrel Study then abandoned that. They requested to6

withdraw the project in January then abandoned that motion7

and come back with a series of requests for extension.8

And I think that -- here is where there is a lack9

of proper regard for the public and for the kind of10

resources the public is putting in. And to boot in this11

case, we don't have a public notice from Solar Trust of12

America as to the new project. They're exploring it, they13

are thinking about a redesign. It's a hypothetical project.14

There is no real project here as yet.15

Second, I think that this is not the forum for16

making this decision. What Solar Trust of America is17

requesting here is a major policy shift. And it seems to me18

it is important to remember that the CEC as a forum, as a19

decision-making body, is really largely outside the public20

view, largely outside public scrutiny. There are very few21

people today from the public on this call. I didn't hear22

anybody recognized but I doubt there is anybody from the23

media on this. This is an important policy shift that I24

think, in fact, ought to be subject of some considerable25


41

public review and public scrutiny. Certainly there are1

other groups that would be interested in this.2

Another way to put this is I think Solar Trust of3

America is engaged in a kind of blatant attempt to capture4

the CEC to serve its interest on the basis of argument that5

goes far beyond the intent of the Warren-Alquist Act to6

focus on solar thermal plants of 50 megawatts or larger.7

This is not the forum to shift that focus because the public8

doesn't provide, doesn't have the opportunity to review this9

and participate fully. And I don't mean any disrespect to10

the Commission but the reality is there is not much of the11

public here. A major policy shift such as this really12

should be made in the legislative arena. So again, this is13

Sid Silliman, Desert Tortoise Council and I thank you.14

HEARING OFFICER VACCARO: Thank you, Mr. Silliman.15

The other brief as I mentioned a few moments ago is from16

Center from Biological Diversity. I am just going to check17

whether or not Ms. Belenky is back on the line and available18

at this time to make oral argument?19

MS. BELENKY: I have just rejoined and I would20

like to -- if I could I would wait until the next person. I21

don't know what happened in the, you know, the ten minutes I22

was gone.23

HEARING OFFICER VACCARO: In the ten minutes that24

you were gone we -- I don't know if you heard any of staff.25


42

We did hear from staff, we have heard from Western1

Watershed Project and we have heard from Desert Tortoise2

Council. And since you were the additional party who filed3

a written brief it's actually perfect timing for Center for4

Biological Diversity to make its oral argument.5

MS. BELENKY: Okay, well thank you for giving me6

this time. I think we submitted our papers, we generally7

agree with the staff's interpretation on the statute and the8

regulations.9

I feel that the most important question here also10

is that this looks to be an overreaching of the jurisdiction11

of the Commission. There seems to be no standards and no12

end in sight. If the Commission were to take jurisdiction13

over this matter there would be no limit to its ability to14

take jurisdiction over any other matter that was ostensibly15

a power plant in the state of California. And we think that16

this both encroaches on the jurisdiction of the counties and17

cities and other entities and that it is not the intent of18

the statute and it is not appropriate.19

Otherwise I think we would simply stand on the20

issues that we have raised in our brief and particularly21

point the Commission also to the letter that was submitted22

by the County of Kern, which is very actively dealing with23

many of these applications at this time.24

HEARING OFFICER VACCARO: Okay, thank you,25


43

Ms. Belenky.1

At this point we would like to hear from the other2

parties to this action, even though they did not submit any3

briefing. So, Ms. Klebaner, if you are still on the line is4

there any argument that you would like to make on behalf of5

CURE?6

MS. KLEBANER: No, thank you for the opportunity.7

HEARING OFFICER VACCARO: We have not yet heard8

from Kevin Emmerich or Laura Cunningham of Basin and Range9

Watch. I don't know if they have been able to join us. If10

you are on the line this is your opportunity to make11

argument.12

(No response.)13

HEARING OFFICER VACCARO: I am not hearing any14

response.15

So Kerncrest Audubon Society, I don't know whether16

we have been joined by Mr. Burnett or Mr. Middlemiss. If17

anybody is on the line on behalf of Kerncrest Audubon18

Society this is your opportunity to make oral argument.19

(No response.)20

HEARING OFFICER VACCARO: Okay, I am not hearing21

any response.22

I think then the reasonable and fair thing to do23

before we move onward with public comment is to allow the24

applicant an opportunity to respond to the arguments made by25


44

the other parties. Mr. Galati.1

MR. GALATI: Thank you, I'll be brief.2

First responding to staff. I just have a3

question. Why would anybody choose to go through the NOI4

process when all they had to do was to file a simple Notice5

of Waiver? The NOI process, especially back in the '70s and6

'80s is a long, lengthy process that could take up to 367

months and then you had the right to file an AFC. So nobody8

on their right mind who was on the list and was9

grandfathered would have elected to do the NOI process10

versus the Notice of Waiver. It has nothing to do with ho11

far you are in the process. If you were at the beginning of12

the process and didn't have to go through the NOI you13

wouldn't.14

Second of all, the Attorney General opinion on --15

the issue about thermal power plant. A project that uses16

thermal energy that is less than 50 megawatts is not a17

thermal power plant. So anybody that also says that this18

waiver could have possibly been for projects that are19

smaller than 50 megawatts, they aren't a thermal power plant20

in the same way as a PV project is not a thermal power21

plant.22

That's how the Legislature has written the23

provision. They did not write a provision that says PV is24

excluded from jurisdiction. They did not write a provision25


45

that says, projects less than 50 megawatts are excluded from1

jurisdiction. They included a definition of thermal power2

plant. And so you heard Mr. Therkelsen discuss how since3

1974 and certainly in 1994 everybody thought that maybe4

somebody who uses this might be a 49 megawatt person who5

wouldn't normally have to come here.6

But I contend when you look at the language, a 497

megawatt gas-fired power plant is no more a thermal power8

plant than a 70 megawatt PV project. So the waiver applies9

to something or it applies to nothing. That is really the10

crux of our argument.11

It is inappropriate to read the term "facility"12

and not use the definition of thermal power plant. They13

need to be read together. And the only way to come up with14

staff's analysis is to only read part of that definition.15

It's either to say it only applies to grandfathering16

provisions and the Legislature was not smart enough and the17

Energy Commission was not smart enough to take out that18

provision when they took out all the other provisions, which19

the Supreme Court says you cannot do. Or it is only to read20

part of the definition and say, oh, it applies to thermal21

projects less than 50 megawatts.22

You have to read them together. And for evidence23

of why you read them together, and other people, not just24

Mr. Galati talking, the Attorney General opinion that they25


46

cite reads them together. And the Legislative Council1

opinion that we cite reads them together. You must read2

them together. And when you do you come out with a3

provision that has no purpose.4

As far as 25502.3 being listed. This is what I5

believe to be the case. The 25502.3 waiver is the big6

circle. It's the large, general waiver. The 25501.7 is the7

waiver specifically for those smaller projects. I assume8

those projects on the list.9

25501.7 is still intact. If somebody had a CPCN10

on a project and wanted to do a 30 megawatt addition;11

wouldn't normally be here. Let's even say it was thermal,12

okay. A 30 megawatt addition. If they had a CPCN they13

could waive the provisions that they are excluded and do14

that modification under 25501.7 today. Because it still is15

intact, it just no longer deals with grandfathering projects16

on a list or projects that were there for three years. It17

deals with projects that have a CPCN. And who knows, if18

somebody had a CPCN in 1972 or they got it when they were19

under the list and they now want to add 30 megawatts to it,20

they could waive under 25501.7 and come to the Commission.21

But the Legislature in 1974 recognized those22

weren't all the people that could waive. They needed a23

general waiver, a much larger waiver, and that's the only24

explanation for 25502.3 and it's what they said in 1994.25


47

And you heard Mr. Therkelsen say -- and while Mr. Therkelsen1

does not speak on behalf of the Legislature he does remember2

why the Energy Commission didn't ask for 25502.3 to be3

removed. That just gives us just an extra little4

underpinning in case there is any question.5

But look at the specific language. The specific6

language in and of itself. You don't need any legislative7

history. You just need the simple provision of the case law8

that says, you can't come up with absurd results. Need to9

follow the legislative guidance to say, don't wed yourself10

to definitions when they don't make sense. And look at the11

provision that says, this waiver is different than 25501.712

because it says "except that waiver."13

To address the issue on forum shopping. We're not14

talking about forum shopping for who does the CEQA analysis,15

okay. And I know that you might be dealing with that in16

other projects. We're talking about who issues the permit,17

that's what we're talking about. And if the waiver is18

applicable and if an applicant elects to use the waiver they19

are subject to the Energy Commission's exclusive permitting20

jurisdiction which complies with CEQA.21

I would also like to address this basic notion22

that somehow local agencies are gypped. That local agencies23

don't have a voice or that the public is duped if we come to24

the Energy Commission. I challenge anybody in this room and25


48

on the phone to find a more rigorous process and more public1

input in a CEQA-related matter than any project that I have2

ever worked on at the Energy Commission.3

There's more public hearings and public4

opportunity in this process than there is required by CEQA.5

You know, CEQA you don't even have to have a public6

hearing, just written comments. At the Energy Commission7

there's the right to put on evidence, there's the right to8

challenge, there's workshops. There is no public disservice9

by an applicant asking to come here. There is only a public10

service if they come here.11

So this idea that there is an ulterior motive that12

we are going to try to get out of mitigation or not listen13

to the local agencies, when has that ever happened at the14

Energy Commission? Never. The local agencies have a say,15

they have access and the public has more access here than16

ever before. I also challenge just a simple look at the17

mitigation that projects that went through the counties are18

paying and mitigating versus here at the Commission.19

So again what we are talking about here is an20

interpretation of the existing law. You have the right to21

do it. You are the agency to do it. It's your law. And we22

think we presented to you a very, very clear case how you23

are not extending your jurisdiction, you are just invoking24

this particular provision that has been there since 1974 and25


49

was reaffirmed in 1994.1

I think that's all we have to say in rebuttal so2

thank you for that opportunity.3

HEARING OFFICER VACCARO: Okay, thank you,4

Mr. Galati. I think your final comments are probably a very5

good segue to the public comment portion of today's6

proceeding. I think it would be appropriate, given that7

Mr. Galati just referenced the local public agencies, to8

hear from the County of Kern. So, Mr. Murphy, I notice that9

you are still on the line. If you are willing to make any10

comment -- I know that we did receive the letter just this11

morning from Kern County so this is your opportunity in the12

public comment portion to speak if you would like to do so.13

MR. MURPHY: Yes we would, I appreciate that.14

Again, my name is Craig Murphy; I'm the Division Chief for15

the Kern County Planning and Community Development16

Department. A couple issues I'd like to address. First of17

all from a permitting standpoint, solar photovoltaic18

projects in Kern County require the issuance of a19

conditional use permit.20

The issue for the County here really is the fact21

that the project is proposed on private land. Kern County22

is very familiar with solar photovoltaic projects. We have23

been processing 20 megawatt projects up to 900 megawatt24

projects. We have completed 12 of these projects. We have25


50

got 15 Environmental Impact Reports that are currently in1

process. I am pleased to say from a processing standpoint2

we are getting these documents out and ready for public3

review and consideration by our local officials in4

approximately 11 to 12 months. So we are extremely5

knowledgeable when it comes to solar photovoltaic projects.6

And we really consider it, especially when we talk about it7

on private land, as an issue of land use compatibility.8

Determinations have to be made regarding the9

preservation of ag land. View sheds are impacts that have10

to be looked at, evaluated and should have a local land use11

decision-making process. Access not only to the site but to12

surrounding property owners. Many times these projects are13

located in areas adjacent to some residential or other uses.14

Public impacts. Specifically, solar photovoltaic15

projects and the panels themselves are exempt from being16

reassessed by local jurisdictions. We have specific17

mitigation that we have worked out with the industry. We18

have been working on these for probably about two years now19

as these projects started initially coming forward and we20

have specific mitigation and conditions that we have been21

applying to all of our solar projects.22

Again, what it really comes down to from our23

aspect is that this is an issue of local jurisdiction, land24

use compatibility. You know, I don't see any reason why we25


51

wouldn't be able to handle this project and expedite it to1

get it to the decision-making process any more efficiently2

than anybody else.3

With regards to the comments about local input.4

While it very well may be that there is public input through5

the CEC process, when it comes to these type of issues6

people know their council members, they know the board of7

supervisors members. They're familiar with the process,8

they're familiar with being able to go to a board hearing9

and stand up and speak. So while there may still be an10

opportunity for public process, when it comes to projects on11

private lands clearly people are more comfortable calling us12

to ask questions, appearing before our elected officials to13

state their comments, than they would be in any other forum.14

You know, in all honesty, if the CEC were to take15

jurisdiction, you know, the local agency considers that that16

they would be subverting the local zoning process and the17

local responsibilities that the Kern County Board of18

Supervisors would have when it comes to jurisdiction on19

local property.20

There are no technical engineering expertise that21

is necessary for a solar photovoltaic project that the22

County would not be able to handle and deal with. Again,23

there are franchise routes when it comes to connection to24

substations that have to be dealt with. These are all25


52

issues that the County is extremely familiar with, extremely1

knowledgeable when it comes to the processing. We have been2

working with the industry for over two years on these3

projects. We are preparing Environmental Impact Reports for4

any project of substantial size given the local and5

cumulative effects associated with these projects.6

And quite honestly, I would doubt that there is7

any local jurisdiction that is more familiar or8

knowledgeable when it comes to these types of projects than9

Kern County. When it comes to renewable energy, we have10

adopted our renewable energy goals. We have been processing11

wind and solar projects for an extended amount of time and12

it is our determination that this is a land use13

compatibility issue that is more appropriately addressed at14

the local level than through the CEC.15

With regards to whether that is a possibility of16

the project or portions of it being proposed on BLM17

property. I would also note that we have a number of18

projects where we are preparing joint EIR/EIS documents that19

are also proposed on BLM. Again, these are things that we20

are not unfamiliar with.21

And it is just our position that really when it22

comes down to the siting of these projects it is more one of23

local land use compatibility. Decisions have to be made on24

whether or not certain projects are appropriate in certain25


53

locations and we have the process in place by which we can1

go through that analysis and ultimately that decision-making2

process.3

And it is our determination that specifically when4

it comes to private property, any taking of the local5

elected officials' jurisdiction when it comes to the types6

of mitigation, the types of conditions and the types of land7

use authority and permitting process, we believe that would8

be inappropriate. And we don't see any reason why it is not9

more efficient and better to have the project proposed and10

processed at the local level than through the CEC.11

So again, that would conclude my comments. I12

would absolutely be willing to answer any questions your13

Commission may have or anything along those lines.14

PRESIDING MEMBER BOYD: Mr. Murphy, this is15

Commissioner Boyd. A little bit of a reaction to your16

presentation and your written submittal. What I see before17

us now is no question on your process, on your county's18

knowledge. Your county, in my long familiarity with it, has19

every right to feel proud of your processes and your20

knowledge.21

And this is not an action to consider taking away22

your jurisdiction in any way, this is, as I have listened to23

it and read all the materials, is a question of the right of24

an applicant to voluntarily request it be subjected to the25


54

CEC standard process rather than not. And that has yet to1

be adjudicated or decided. So it is not to be -- it should2

not be interpreted as taking away your jurisdiction.3

The other point that is puzzling to me, and the4

applicant or staff or others can comment at any appropriate5

time, is the private land versus public land issue you have6

raised. Your letter is pretty strong on the point that all7

solar PV projects on private land are the jurisdiction of8

your elected officials. And you have made the argument that9

land use on private property therefore is the sole10

jurisdiction of the Kern County Board.11

I don't even think that's a question before us or12

if that's that relevant a statement to the question before13

us. But I just wanted to point out at this point this14

Commissioner doesn't see it as a private land versus public15

land issue. Or do I see it as us versus Kern County or any16

taking away of jurisdiction. Anyway, I wanted to say that17

at this point in time because I am a little puzzled by some18

of the testimony and we'll have to deal with it.19

MR. MURPHY: Commissioner Boyd, if I may respond.20

I do appreciate those comments. I don't believe that it21

would be the CEC that would be doing this. I think we are22

more afraid of the unintended consequences. We have a23

number of solar projects that we are currently processing.24

And I am not saying that your -- that the CEC doesn't have25


55

the right to make this determination or whether or not --1

you know, I know that most of the discussion previously was2

along whether or not you can or cannot even take that3

action.4

I bring for you a more straightforward approach5

when it comes to the actual processing and just the opinion6

that in practicality and in process, based on the issues7

that have come up in terms of our processing, that we8

believe that it is more appropriate that these be handled at9

the local level rather than through the CEC.10

Again with that being said, I do appreciate your11

comments and in no way did we really take that as the case.12

We are just more concerned about every single project then13

deciding and making that determination, well, I'm going to14

go through the CEC process instead. You know, I have no15

idea exactly what you would require. Again, we have had a16

number of discussions with smaller projects ranging in size17

from 10 to 15 megawatts to again, we processed a 90018

megawatt solar PV project.19

So again, part of it really has to do with the20

potential unintended consequences. And again, it is just21

our position that given the fact that really what it comes22

down to is a land use compatibility issue, whether or not23

it's appropriate for this site to be located at this24

location adjacent to these additional uses. Especially25


56

since the fact that we are not allowed to reassess a1

majority of the projects based on property taxes, based on2

the fact that there are a number of interconnection concerns3

that need to be dealt with. Not so much in the Ridgecrest4

area but in the Rosamond area specifically. It is just our5

position that this is better and more appropriately6

processed at the local level.7

But again, with that being said, if our letter8

came off, you know, it did not intend to come off that the9

CEC was trying to take over land use decision-making from10

our local officials. We were just afraid of unintended11

consequences and the fact that that is generally not the12

case when it comes to other types of projects that we13

consider to be of, you know, where the primary issue is one14

of land use compatibility.15

PRESIDING MEMBER BOYD: I thank you for your16

comments. It still leaves a big question lying on the table17

for us to consider. I struggle to see that big a difference18

at this point in time between a PV project and any other so-19

sized industrial project.20

And it does seem to me that any county's concerns21

would be considered in the state process just as much as22

they would be considered by the local folks. But that's not23

the issue here so thank you for your response.24

And I don't know, Mr. Galati, if you want to -- or25


57

the staff wants to comment at all since I've started an1

exchange here.2

MR. GALATI: No, other than I can just say to Kern3

County, there are all good reasons that an applicant might4

elect to go to the County. Certainly here -- worked on a5

lot of projects where the issues were primarily county,6

including a lot of the renewable projects that we processed7

last year.8

And we think that the Energy Commission made us9

comply with the County's LORs. And the Energy Commission10

looked at impacts, looked at the effects of the tax base and11

the revenue and what the impacts were and there's quite a12

bit of mitigation in a lot of those projects that have to13

deal with those impacts to the County that would normally be14

offset by taxes. I think that the Commission has been doing15

that because all projects since the Commission has been16

around have been in a city or a county and the Commission17

has a long history of incorporating that county process,18

through staff analysis and through actual testimony and19

decision-making.20

I understand that Mr. Murphy is proud of what he's21

done and we'd certainly like to continue to talk with him22

about how good he is. We're a developer and we are not23

doing one project in California, we want to be here for a24

long time. So we'll continue to talk to Mr. Murphy but I25


58

think it doesn't have any bearing on what we had asked you.1

MR. BABULA: I would just add that the -- I mean2

the County, I can understand the County's concern being that3

if they have a number of developers who have been coming4

before them and they suddenly have this new option that5

wasn't clearly around before then that could change the6

dynamics in the way the counties deal with developers,7

trying to get things done there, if they have an out where8

they can just come over to the Energy Commission.9

PRESIDING MEMBER BOYD: Well, I guess I am old and10

curmudgeonly enough to feel, and experienced enough to feel11

that the Energy Commission process is pretty fearsome,12

foreboding, lengthy, thorough. Up until today I would have13

thought people would go out of their way to avoid coming to14

the Energy Commission. But we're dealing still, in my mind,15

with an issue of interpretation, the meaning of law. Enough16

said.17

HEARING OFFICER VACCARO: We'll continue with the18

public comments. We have a number of callers who are not19

identified. I suspect some of you are members of the public20

who would like to make a comment. So if we could hear from21

you at this time we'd appreciate it.22

(No response.)23

HEARING OFFICER VACCARO: There is no one24

clamoring to be heard but again I'll make the call. If25


59

there are any individuals on the phone line, members of the1

public --2

MS. DECKER: Hello?3

HEARING OFFICER VACCARO: Or members representing4

agencies, we'd like to hear from you.5

MS. DECKER: Hello?6

HEARING OFFICER VACCARO: Hello.7

MS. DECKER: This is Judy Decker from Ridgecrest.8

HEARING OFFICER VACCARO: Hi, Ms. Decker. Would9

you like to make a comment at this time?10

MS. DECKER: I have a question. The gentleman11

from Kern County talked extensively about this project and12

private land and Mr. Galati did not question that. Does the13

project now include private land?14

HEARING OFFICER VACCARO: Mr. Galati, if you would15

like to answer.16

MS. DECKER: And if so, where is it?17

MR. GALATI: No, the project does not include18

private land. What we are looking for is a configuration19

south of Brown Road in a smaller way to mitigate the impacts20

that have been identified. I apologize for not correcting21

the Kern County Planning Director on that issue. But I22

think the issue before the Commission is unrelated to23

whether it's private or public land, as Commissioner Boyd24

said. But we are not proposing anything on private land.25


60

MS. DECKER: All right, thank you. And if you are1

doing a new project I do have another question for you.2

Does not the issue of the Mojave Ground Squirrel still,3

still be there?4

HEARING OFFICER VACCARO: I'll answer that at this5

time, Ms. Decker. The actual or potential impacts of the6

project that is currently before the Commission or proposed7

redesign are matters that would certainly be a part of the8

evidentiary process, things that would be included in the9

staff assessment subject to other comment and testimony from10

parties as well as interested persons.11

But none of those matters are at issue today. The12

only question before the Committee is to hear from the13

parties and from the public on the very narrow issue of the14

applicant's intention to use this provision of law to have15

the Energy Commission assume jurisdiction over what might be16

a 100 percent photovoltaic project.17

MS. DECKER: Right. Well, I will echo18

Mr. Silliman's sentiments about, about the public also.19

HEARING OFFICER VACCARO: Okay, thank you.20

Are there any other members of the public on the21

telephone who wish to make a public comment at this time?22

(No response.)23

HEARING OFFICER VACCARO: Not hearing any. I24

don't see any members of the public in the room but I have25


61

been wrong about that before. So I will scan the room and1

ask whether or not there are any individuals in the room who2

wish to make a public comment?3

(No response.)4

HEARING OFFICER VACCARO: No one is even making5

eye contact with me at this moment so I am going to take6

that as a no. And unless Commissioner Boyd has any further7

questions I will turn this over to him to adjourn today's8

proceeding.9

Before I do that, the Committee will not be10

issuing a decision from the dais. This is a matter -- it's11

weighty, a lot of complex issues as briefed by the parties.12

This is a matter that will be taken under submission by the13

Committee.14

PRESIDING MEMBER BOYD: This is Commissioner Boyd.15

In closing it would be very easy for me to just say, fine,16

we have taken everything under submission and we will --17

(Music coming through telephone line.)18

PRESIDING MEMBER BOYD: How appropriate. Somebody19

has their Muzak playing again throughout our room. Thank20

you. Thank you, Maggie, I believe.21

In any event, I am compelled to make a few22

comments that don't bear on the specifics of the decision as23

I see it but just to make it clear again, as has been stated24

before, we are not deciding on this project or a project.25


62

Not deciding that the CEC has jurisdiction over PV in1

general. React to earlier comments about people capturing2

the CEC or its Commissioners. I don't think that's been the3

truth, a fact in the past and I don't think that's a true4

statement.5

And the decision here does not, does not really6

bind any other decision. We have had the public land versus7

private discussion. We have had points of view on this is8

an attempt to exclude public process and it's forum9

shopping. And I think I would concur with any comments10

about the thoroughness of the Energy Commission's process11

and the staff's process. It's not necessarily the12

Commissioner's process, the entire process. And I would13

historically think people would try to stay away from here14

if at all possible.15

Therefore, the question before us, again in my16

mind, is looking at the statutes, "the law" quote/unquote,17

as to an applicant having the legal right under this law to18

voluntarily submit to CEC review. I think that's a simple19

lay, my simple lay interpretation. That is the issue we20

have taken under submission and have to debate.21

It has nothing to do with the thoroughness or22

competence of a review process at a local level. It does23

not exclude the CEC process in general. No matter what the24

project is it does not exclude any local input or any input25


63

from local government in particular.1

So again we are back to a very complicated, albeit2

in my mind, fairly narrow interpretation of the intent or3

the meaning of California statute. That is not going to be4

an easy choice.5

I have perhaps less history than Mr. Therkelsen6

with the Energy Commission but probably more history than7

anybody on the phone or in this room in the operation of8

state government and the need to interpret the meaning of9

the Legislature or what they may say in a narrow comment on10

something and its applicability to a broader question. So11

in any event we will be guided by, certainly advice from the12

Committee's own lawyer.13

And with that I will thank you all for being here14

and adjourn this hearing.15

(Whereupon, at 11:45 a.m. the Committee16

Hearing was adjourned.)17

--oOo--18

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CERTIFICATE OF REPORTER

I, JOHN COTA, an Electronic Reporter and

Transcriber, do hereby certify that I am a disinterested

person herein; that I recorded the foregoing California

Energy Commission Committee Hearing; that it was thereafter

transcribed into typewriting.

I further certify that I am not of counsel or

attorney for any of the parties to said hearing, nor in any

way interested in the outcome of said hearing.

IN WITNESS WHEREOF, I have hereunto set my hand

this 28th day of July, 2011.

JOHN COTA

Documents

COMMITTEE HEARING OF ORAL ARGUMENTS CALIFORNIA ENERGY ... · 25/07/2011 · Bob Therkelsen Therkelsen Energy and Environmental Consulting. ... Adams, Broadwell, Joseph & Cardozo